Ventura County hospital costs frustrate patients: 'How do you charge that much money?'

The February visit to the wound center at Los Robles Regional Medical Center carried a sticker price of $15,018.50.

According to the claims document Lynne Regan received from her insurer, her coverage brought a discount of more than $13,000. Her plan covered about $1,340 of the remaining balance.

She owed “only” $299 to the hospital.

But she needed care on nine different visits to the for-profit Thousand Oaks hospital, all stemming from a February fall down a stairway that left a wound that looked like a shark feasted on her leg. She said each trip brought high sticker prices and about the same out-of-pocket costs.

Statements for five of the claims provided to The Star added up to about $1,500 owed.

“That's a chunk of change for less than 10 minutes,” Regan said, praising the care she received but venting frustration at sticker prices and a billing system she can't decipher. "How do you charge that much money?"

It happens all the time. Though federal and state governments require transparency in the form of in-depth cost breakdowns that project a patient’s charges and out-of-pocket costs, hospital billing remains a labyrinth spring-loaded with surprises. Some numbers resemble the currency found in Monopoly games and, according to hospitals, have little impact on what patients pay. Others are painfully real.

A routine appendectomy carries a sticker price of $12,000 at Ventura County Medical Center and can cost an insured patient $1,800 depending on the coverage, according to a website estimator that cautions actual prices may be different. Three blocks away at Community Memorial Hospital in Ventura, the same procedure carries total charges of $37,119 with estimated out-of-pocket costs of $1,430 to the same patient on the same coverage.

At a third hospital, St. John’s Regional Medical Center in Oxnard, the sticker price is about $35,000 and the covered patient may pay about $3,787.

It’s a system Dr. Renee Hsia describes as the Wild West. The emergency room doctor and UC San Francisco public policy researcher started studying hospital pricing 13 years ago after a friend was billed nearly $60,000 for an appendectomy. Her research showed prices jumped from hospital to hospital with listed charges ranging from $1,529 to $182,955.

Since then, federal and state agencies have reinforced transparency rules and tried to make patients aware of their rights. But the pricing system remains largely unregulated with hospitals carrying far too much power, Hsia said. She wrote an op-ed in the Los Angeles Times in December detailing how a friend with private insurance took her daughter to the same hospital emergency room for the exact same procedure twice in the same day.

One visit cost $3,561. The other cost $6,056.

“I think it’s getting worse,” Hsia said in a phone interview. “The root cause is how it’s organized. We have a very market-oriented approach to health care with a lot of private finance and private insurance. There’s lots of inefficiency."

How the hospital pricing system works

Cost documents sent to patients after a procedure and in many projections provided on hospital websites start with the sticker price. The gross charges for a total knee replacement is $83,511 at Community Memorial Hospital in Ventura and $90,444 at the Ventura County Medical Center, according to the hospitals' websites.

The numbers are misleading, according to industry representatives.

“What people pay for their care is not what a hospital’s ‘list price’ is. It is what their insurance plan requires of them,” said California Hospital Association spokesperson Jan Emerson-Shea in an email.

Charity care and other discount programs mean uninsured patients often don't pay the full price either, sometimes receiving a discount of at least 50%. Federal law requires hospitals reveal the total charges, but the numbers carry little weight, she said.

“That’s why the price transparency requirements really are meaningless in many regards,” Emerson-Shea said.

Others contend the often inflated sticker prices are sentinels of a broken system of sky-rocketing costs and prices that have resulted in $200 billion in medical debt across the country. Hsia said people who don't have insurance but make too much money to qualify for Medi-Cal or for charity care programs are stuck with the sticker prices.

The gross charges, she said, also push insurance premiums higher and affect what people pay in coverage when their share is dependent on a percentage of costs.

No one is hurt more than people who are uninsured, said Jim Lott, a former hospital administrator who served as an executive vice president for the Hospital Association of Southern California and now teaches health care classes at California State University, Los Angeles.

Not all uninsured patients receive discounts or know to ask for them, Lott said. Those who don't are left with the sticker price. If they don't pay, their total debt is sent to collections.

“If you’re not insured, you’re going to get killed,” he said. “Going without insurance is a first-class ticket to bankruptcy.”

A roller coaster ride

The pricing system is marked by sudden, unexpected turns. Consumers vent on social media and emails about unexpected out-of-network charges, sticker prices of $26,000 for CT scans, hospital estimates that don't include doctor's charges and being double-billed for procedures that are repeated because of mistakes made by hospital staff.

Some of the stories center on hospitals. Others focus on associated surprises.

Corrin Hoglund of Thousand Oaks was working from home at her Thousand Oaks condominium in March when she was hit by pain in her belly so intense she vomited.

She called for an ambulance, knowing the short ride to Los Robles could be expensive but would be worth it. The hospital’s emergency room was full. The ambulance was diverted to Adventist Health Simi Valley 16 miles away.

She received a CT scan and an ultrasound at her hospital. Doctors told her the pain was caused by a condition she had been diagnosed with years earlier. Her bill shows a total charge of more than $19,000. Her share was more than $2,000.

She’s OK with the out-of-pocket expenses for the emergency. It’s the surprise $3,675 bill from the ambulance company that frustrates her. A new California law limits what ambulance companies can charge for out-of-network rides. Still, Hoglund was told her insurance covered none of the costs because she hadn't met her $7,000 deductible.

She’s chipping away at her medical debt with monthly payments.

“My gut reaction is that no one should not know what their bill is,” she said. “You should always know this is about what this is going to cost. I feel like they’re preying on people because they can.”

How to cope

Like the pricing system, the laws designed to bring transparency are complicated. Hospitals are required by federal law to provide costs on every service they provide in data often presented in spreadsheets that contain thousands of code-laden entries.

They are also required to present charges for 300 elective procedures in a consumer-friendly format. Many hospitals present the information on their websites via price estimators that break down self-pay rates and out-of-pocket costs depending on an individual’s insurance coverage.

The price-estimator lists must include 70 procedures mandated by the federal government. Hospitals can choose the other 230 services on the list, meaning not every facility displays the same procedures. Consumers can also call hospitals and ask about the costs of any procedure.

Some hospitals provide estimates that only show what a patient will pay out-of-pocket. Consumers need to ask for a full break down that includes the self-pay price because it could be less than the insured rate, said Marni Carey, president of Power to the Patients. The national nonprofit pushes for more transparency regulation on hospitals and more severe penalties on systems that don’t comply.

Some hospitals ask for birth dates and insurance identification numbers to process out-of-pocket estimates. Carey describes such efforts as a “data grab” and noted the federal law prohibits hospitals from asking for personal information.

“Consumers need to get the price without barriers. You shouldn’t give out any information,” she said.

Chad Mulvany, vice president of federal policy for the California Hospital Association, said the personal information may help hospitals figure out insurance coverage details that enable more accurate estimates.

People can often find more relevant information about hospital prices from their insurer’s websites, he said. Like hospitals, health plans are required by federal law to provide pricing information. Mulvany contended future legislation should focus on the health plans because they know more precisely what patients may pay.

So is hospital pricing transparent? Mulvany answered by citing state and federal regulations.

“They’re complying,” he said of California hospitals.

Others question the efforts of hospitals, including Mary Ellen Grant, spokeswoman for the California Association of Health Plans. And while Mulvany and others push for more regulation on health plans, Grant said hospitals set their own prices and only sometimes follow rules regarding pricing requirements.

"There is actually very little transparency when it comes to hospital finances even though hospitals are the largest cost driver in the health care industry," she said.

Ventura County hospitals reluctant to talk

Of the five systems that run hospitals in Ventura County, four declined or didn’t respond to interview requests. A spokesperson for St. John’s hospitals in Oxnard and Camarillo offered a statement.

“Empowering patients to understand their health care costs and ensuring compliance with price transparency requirements is a top priority for St. John’s Hospitals,” spokesperson Christina Zicklin said. “When consumers are researching potential costs associated with a procedure, there is a cost estimator tool on our website they can use.”

Megan Merino, a spokesperson for Los Robles in Thousand Oaks, emphasized gross charges aren't what patients pay in a written statement. She encouraged consumers to contact the hospital's financial counselors.

Patrick OConnor, the one hospital administrator who agreed to be interviewed, serves as director of revenue integrity at two county-run hospitals designed to serve people with little or no coverage. He said the Ventura County Health Care Agency wants to provide as much information as possible and reduce the chances of billing surprises.

“They just really want to know how much it’s going to cost me to have XYZ,” he said of patients. Their questions can usually be answered but sometimes it's impossible to know exact costs because of medical complications and needs that vary from one patient to another.

“Getting to that level of transparency is too hard because medicine is personalized,” he said.

'Deliberately obfuscating'

Advocates said some hospitals purposefully make it hard for people to decipher what they’ll pay.

“They don’t want to do this. They’re kicking and screaming,” Carey said. “It’s deliberately obfuscating.”

Michael Klein, a software sales manager from Palos Verdes, said hospitals aren't used to being challenged about prices or anything else. After his 18-month-old son slipped and broke his leg three years ago, Klein was told the boy needed surgery though his pediatrician suggested less aggressive care.

Confused over what path to take, Klein asked staff at MemorialCare Miller Children’s & Women’s Hospital in Long Beach how much the procedure would cost. He said he took his son out of the hospital when he didn't get an answer and was told later by his insurance company that procedure wasn't covered and would have cost at least $10,000.

He said that after he canceled the surgery the hospital reported him to child protective services who called the police. He said he told them what happened and the investigation ended.

A spokesperson for MemorialCare said she couldn’t comment on specifics but noted a request about pricing would have had nothing to do with the hospital’s decision to report a case to child protective services.

Klein now advocates for federal legislation aimed at reinforcing calls for hospitals to publish actual prices — not estimates — and would also increase penalties for facilities that don’t follow the law. Klein said the goal is to usher in checks and balances and end an era of blind trust.

“Whatever hospitals and doctors say, people just don’t question it,” he said.

Complaints bring hope

Hospital leaders said transparency is improving. They push regulators to focus future efforts on insurance plans. Others suggest more dramatic action.

Lott, the former hospital administrator, said the financial system is broken. Medical costs facing hospitals and other providers are too high and so are prices for patients. Consumers don’t seek the care they need. When they do go for treatment, they may be paying off the debt for years, especially if they don’t have insurance.

He pushes for stricter laws compelling people to obtain insurance by aggressively increasing the penalties for those who go without coverage. He also suggests government regulation in the form of laws that limit what hospitals can charge.

"We have to move away from a market-driven system," he said. "We've had over a century of open-market competition, and it hasn't kept spending down."

Hsia said hospitals are allowed to set their prices at any level they choose, and that there’s no standard and too much autonomy. Allowing people of all ages the choice of being insured by a government plan — think Medicare for all ― would bring leverage that could push hospital prices down, she said.

She said the growing frustration at pricing levels also offers reassurance in a strange way. As people grow more aware of the flaws in the system, they’ll push harder for change.

"I think people used to think it's a one-off thing or there was an error," she said. "Now, they're aware it's not just happening to me. It's happening across the United States to almost all people who receive health care."

Tom Kisken covers health care and other news for the Ventura County Star. Reach him at tom.kisken@vcstar.com .

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This article originally appeared on Ventura County Star: Ventura County hospital costs frustrate patients: 'How do you charge that much money?'